Theresa May has laid down the law to the Police Federation, warning its members they must vote to reform their organisation or face seeing it abolished by Parliament.

In a hardline speech to the Federation's annual conference in Bournemouth, Mrs May announced a series of surprise measures which she said will make the organisation more transparent.

The Federation - which represents 126,000 frontline police officers in England and Wales - has come under increasing criticism for its role in the Plebgate affair, while police ethics have also come under the spotlight after a series of scandals, such as claims officers were ordered to smear the family of the murdered black teenager Stephen Lawrence.

Mrs May said the Federation must introduce a series of reforms put forward by an independent review earlier this year or face being disbanded.

"The Federation was created by an Act of Parliament and it can be reformed by an Act of Parliament. If you do not change of your own accord, we will impose change on you," she said.

"You can choose the status quo or you can choose change; you can choose irrelevance or reform; you can become another reactionary trade union or you can make sure the Police Federation becomes once more the authentic voice of policing in this country.

"We’ve seen accusations of bullying, a lack of transparency in the accounts, questionable campaign tactics, infighting between branches, huge reserve funds worth millions of pounds, and a resounding call for change from your members – with 91 per cent saying things cannot go on as they are."

She said there had been a series of high-profile incidents of misconduct by officers, such as the Plebgate scandal in September 2012 which led to Cabinet minister Andrew Mitchell being forced out of his job.

"The problem might lie with a minority of officers, but it is still a significant problem, and a problem that needs to be addressed," Mrs May told the conference."

She attacked the Federation for encouraging its members to be uncooperative with investigations by the Independent Police Compliants Commission and, more widely, for officers who used stop and search powers in a racist manner.

"It is an attitude that betrays contempt for the public these officers are supposed to serve – and every police officer in the land, every single police leader, and everybody in the Police Federation should confront it and expunge it from the ranks," she said.

In a series of unexpected announcements designed to shake up the Federation, Mrs May said she would change the law to force them to publish all their accounts, including a series of secret funds known as "Number Two" accounts held by local branches, which are believed to hold millions of pounds.

Home Office funds of £320,000 a year to pay for senior officials will be withdrawn as of August, and the Federation will become subject to the Freedom of Information Act, meaning they will have to answer questions from the public and the Press.

In another change, police officers will no longer join the Federation by "default", the Home Secretary said, and instead they will have to "opt in" before membership subscriptions are taken from their salaries.

"My message to you today is that the police must change, and so must the Federation," said Mrs May.

"I'm here to tell you that it's time to face up to reality."

The scale of the Home Secretary's announcements left the conference hall of more than 2,000 delegates in stunned silence.

One officer, Pc Ken Davies from Cheshire Police Federation, told her from the audience: "In 21 years of frontline service I've faced everything including being attacked, hospitalised and saved lives, but I've never had such an attack and a personal kicking as came out in your comments.

"We have the Sword of Damocles hanging over us, and you are threatening to bully us by telling us you will reform us."

The Federation's joint central committee votes for a new chairman on Friday, and the result is expected to indicate how seriously members have taken Mrs May's warnings.

The Police Federation was created by an Act of Parliament in 1919 so that officers, who do not have the right to strike, could be represented by a staff association. "